E-Payments To The Last Mile

Vodafone brings M-PESA mobile money to Romanian with platform support of Huawei

Summary: M-Pesa, the mobile money service that handles nearly half of Kenya’s GDP, is tentatively stepping into Eastern Europe.

Vodafone has launched M-Pesa in Romania, marking the first time the widely used mobile money system has made it across to Europe.

Under the partnership with Vodafone, Huawei has deployed this mobile money platform for Vodafone to launch its first mobile money service in Romania. Huawei has delivered an end-to-end solution to enable Vodafone to provide its customers with a simple, efficient and secure money transfer service in the Romanian market. This service currently enables users to send and receive money, top-up airtime and make bill payments using their mobile phones.

Vodafone Director of Mobile Money Michael Joseph said: “This is the first time that Huawei has developed a technical platform for Vodafone M-Pesa and we are confident that it meets our stringent specifications to offer Romanian customers fast, secure and reliable mobile money transfer and payment services.”

Vodafone partners with Huawei to deploy M-Pesa in Romania

M-Pesa has almost 17 million users around the world, but there’s a good chance you’ve never heard of it. It’s been around for around seven years in Kenya, and from there it’s spread to Tanzania, South Africa, India and Afghanistan. In all of these developing markets there are millions of people who lack formal bank accounts but do have mobile phones, and M-Pesa lets them use their handsets to make and receive payments.

In other words, while carriers and other players are still trying to get the idea of the mobile wallet up and running in the western world, that revolution has already taken place elsewhere. It may be less pretty than a fancy smartphone app, being largely based on SMS, but in Kenya, where Safaricom (part-owned by Vodafone) first launched M-Pesa, it is now the conduit for 43 percent of gross domestic product.

In Romania, people can use M-Pesa to send amounts as low as one new Romanian leu ($0.31) or as much as 30,000 lei ($9,257) per day. What’s more, a Vodafone spokesman told me on Monday that the carrier would be looking into enabling international remittances to Romanian M-Pesa accounts, as is already possible in other markets.

Vodafone will look into providing further M-Pesa-based financial services in Romania during the course of this year. In the meantime, customers there will be able to use the system to buy airtime, pay utility bills, make deposits and withdraw cash from participating agents, and buy goods from those that take M-Pesa.Vodafone expects it to be handled at 2,000 retail and distribution points by the end of the year.

M-Pesa is not quite a sure thing yet — so far its Kenyan success has not been replicated elsewhere — but it is a lot further down the road than other mobile payment systems, and Romania will provide a keenly watched testbed for its expansion. Vodafone has a financial services license for Europe now, so let’s see where else it puts it into action.

The country is a good fit for the service because a majority of its citizens have at least one mobile device, but more than one third of the population doesn’t have access to conventional banking, according to Vodafone.

From Monday, M-Pesa will be accessible to approximately 6 million people in both rural and urban areas in Romania. It can be activated at any one of about 300 Vodafone stores, at participating retail outlets and through authorized agents. By the end of the year there will be a total of 2,000 retail and other distribution points, Vodafone said.

Users will be able to top up their mobile phones, pay bills, make deposits, withdraw cash from participating agents and purchase goods.

In the last few years, a number of mobile money transfer and payment services have been launched around the world with varied levels of success, but M-Pesa has seen some success. It had approximately 16.8 million active customers who made more than €900 million worth of person-to-person transactions per month toward the end of 2013.

The service was originally launched in Kenya in 2007, where it has been a hit. Vodafone’s strategy has been, since the service’s inception, to go after countries where there are a lot of people without bank accounts.

M-Pesa is not quite a sure thing yet — so far its Kenyan success has not been replicated elsewhere — but it is a lot further down the road than other mobile payment systems, and Romania will provide a keenly watched testbed for its expansion. Vodafone has a financial services license for Europe now, so let’s see where else it puts it into action.